Observations and reflections from Tibor R. Machan, professor of business ethics and writer on general and political philosophy, now teaching at Chapman University in Orange, CA.

Saturday, February 07, 2009

Taxation With No Possible Representation

Tibor R. Machan

Among the many flaws in the policy of massive bailouts few have mentioned how it violates the principle of "no taxation without representation," a principle the breach of which prompted the American Revolution. But, sadly, quoting now Anon, "Life is blighted by the tyranny of the urgent over the important.

In this case the urgent is to feel satisfied about doing something, anything, about the economic mess that mainly the government created--with its policy of making home buying easy for everyone, including for those who couldn't afford homes--and the important is to return to a more prudent way of spreading the wealth or whatever is left of it. This prudent way would be to slowly, carefully open the road to serious productivity instead of printing gobs of phony money and burdening future generations, ones not in the position to vote or voice their opinions, with fantastic amounts to debt.

Yes, Virginia, there was a time when nearly all Americans were outraged about being taxed without having their right to vote about the policy violated left and right. They were in fact so upset that they began a process of overthrowing the government that did the violating, that of George III of Great Britain. It was the beginning of the revolution which ended by declaring the governments are not sovereign but citizens are. So government must serve the people, not rule them by imposing coercive policies on them. Those Americans believed, as Jose Ortega y Gasset later put it, that "Civilization is nothing more than the effort to reduce the use of force to the last resort."

So, one thing that's dreadful about the current administration's--and the former's--policy vis-a-vis the fiscal mess is that the remedies proposed all impose massive taxation on future generations, people who haven't the ghost of a chance to speak up for themselves. It is done, in large part, in the name of a English economist, the late John Maynard Keynes, who believed that by pumping non-existing resources into the economy and creating phantom demand for goods and service, the country can be gotten back on its feet, at least economically. And the sooner and faster the better!

But as I have pointed out in previous columns, several researchers have pointed out, after researching the matter in great detail, that the Keynesian policies of FDR's New Deal did not rescue the country from the previous economic mess, the Great Depression and all of its awful side effects. To make the point again, here is what Alan Brinkley said in The New Republic (not in Reason Magazine, nor in Liberty, both of which are committed defenders of laissez-faire economics):

"Roosevelt's initiatives did not, in the end, left the country out of the Great Depression. At no time in the first eight years of the New Deal did unemployment drop below 15 percent. At no time did economic activity reach levels comparable to those of a decade earlier; and, while there were periods when the economy seemed to be recovering, none of them lasted very long. And so this bold, active, and creative moment in our history proved to be a failure at its central task. Understanding what went wrong could help us avoid making the same mistakes today..."

What's more, it appears that no one in the major media has the guts or savvy to challenge the Obama team, judging by, for example, how this matters is not brought up ever on The News Hour With Jim Lehrer, a program I watch diligently not so much because I trust them to be objective any more than say, Fox TV News but because of how it is often lauded by my liberal friends and colleagues for its journalistic integrity. Not a word about no taxation without representation, nada.

Good luck America with this current crop of leaders and the fourth estate watching them all!